The embattled crypto exchange Binance is undergoing a round of layoffs in response to an ongoing investigation by the U.S. Department of Justice Department (DOJ), CNBC reports. The cuts will affect 1,500 to 3,000 employees worldwide and will be carried out throughout the year. The Wall Street Journal had reported that 1,000 employees had already been laid off, with the remaining layoffs forming part of the overall planned reduction.
The U.S. DOJ’s probe is expected to significantly impact the company’s operations. If Binance decides to settle the allegations, it could entail a substantial payment, potentially amounting to billions of dollars. The investigation reportedly revolves around potential anti-money laundering violations and sanctions evasion, which could hinder Binance and its founder Changpeng Zhao (CZ), from obtaining licenses to continue operating.
A spokesperson from Binance disputed the claim that 3,000 employees would be affected, stating that the higher number was inaccurate.
As we prepare for the next major bull cycle, it has become clear that we need to focus on talent density across the organization to ensure we remain nimble and dynamic. This is not a case of rightsizing, but rather, re-evaluating whether we have the right talent and expertise in critical roles.”
Binance spokesman to CNBC (link)
Binance has faced significant regulatory challenges in recent months, including lawsuits from the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) regarding alleged mishandling of customer assets and operating an illegal, unregistered exchange in the U.S. Despite these legal actions and the departure of key executives, CZ has expressed confidence in the exchange’s future, even after being personally named in the SEC lawsuit. The regulatory scrutiny has led to substantial outflows from the exchange and a period of turbulence for the company.
